Ross Douthat, writes an interesting column on the NYT today. It's basically a book review for book by Naomi Cahn and June Carbone, entitled "Red Families v. Blue Families: Legal Polarization and the Creation of Culture."
I haven't read the book, but it's on my Amazon wishlist now. This is a topic I'm extremely interested in. As incomprehensible to me as right wingers, and their views are, I've always been interested to see from whence they came, and what effect it has on themselves and their families. This book seems to address this question adrioitly.
The book seems to nail my own demographic. Older, well-educated, northeast couple, has one child. (of course--it's more complicated than that, but this ravingleftatic is anonymous!) That goes for my parent's generation, and my own. I've always argued that education is the answer to world over-population, though I read an article recently that indicated the world's population already peaked, and will likely decline in the next thirty years. I can't swear to it, it was one article, based on one book, but it was interesting.
Regardless, Douthat points out some interesting trends from the Carbone Cahn book. For example, teen pregnancy rates are pretty much the same in Connecticut as they are in Montana, but the rate of abortions is twice as high. This dispels the idea that education keeps kids from having unprotected sex, but the lower divorce and single-parent rates, are much lower, suggesting that access to proper birth control (including but not limited to abortion) have exactly the effect that they are intended to produce.
Population statistics aside, I'd really like to know more about the middle of the country than I do. I have, admittedly, a very serious bias, based purely on my window to the world (the internet.) Most of the people I know from the midwest (and south) moved here because they hated it. Again--not a valid sample!
Monday, May 10, 2010
Friday, April 30, 2010
Toxie, the Toxic Asset, NPR Planet Money
So, I belatedly listen to NPR's Planetmoney. I periodically complain about their reporting, but they do have some excellent segments. In particular ten days ago they discussed securities litigation involved in sub-prime cases.
I happen to have a personal interest in this subject. Their treatment of the subject was pretty good, but it failed to address, and I'd like to add to its address of several topics of importance.
1. Who pays in a securities lawsuit?
2. Who is liable?
3. What is a misstatement?
4. Who actually reads the prospectuses?
5. My favorite, what is the taxpayer's role?
So the podcast discussed a toxic asset bought by the Planetmoney team as an experiment, playfully named "Toxie." Toxie was a bunch of mortgages that were originated by Countrywide, and securitized by Royal Bank of Scotland (RBS). It all started when a listener of theirs told them they were being sued, as an owner of Toxie. This is not entirely true. They bought into the liability of Toxie, but long after Toxie was written down, and resold as an asset. Toxie was worth 2.7 million when she was born, but is now worth 36,000. Who do the securities lawyers go after? The orginators and the securitizers, as well as the buyers who bought in at marketprice. But in this context, they became curious about who was to pay if Toxie was found to be fraudalent. To their credit, the Planetmoney team, got really excited by the securities law. They thought that the lawyers were going after the originators and securitizers with guns blazing. Clearly, and much to my own disappointment, the securities laws don't really allow for this. That's what the SEC is supposed to do. But the SEC rarely takes cases to trial. And they humiliatingly lost the last one they brought to trial in the Eastern District of New York, Bear Stearns. In the interest of brevity, let's go to my questions:
1. Question: Who pays in a securities lawsuit?
Answer: The insurance pays for most of it. That's right, just like every other kind of insurance you can buy, most companies buy legal insurance. Given that securities fraud is so hard to prove, its a winning bet for the insurers, usually. The company does pay too. So do the individual defendents. But of a 100 million dollar settlement, an insurer will pay for at least 40 million of it.
This is important because the main argument against it has always been that if you're suing the company to pay the shareholder, you're actually suing the current shareholders. Trading on the stock market is inherently risky, and anyone who isn't prepared to take those risks should get out of the game. There is also the threat that you can sue a company out of existence. This was the fear in the case against Washington Mutual. That case didn't survive anyway, but there was a definite fear that there wasn't enough coin in the till to pay anyone for the loss of market capitalization in the stock drop.
Another myth is that the company that was sued will just "pass on the cost to the consumer." This is untrue because prices are determined by the market. Companies, particularly in commoditized markets really have very little say in how they can price their goods. Diamond markets are a good example of this--the profit margin in diamond selling is pretty narrow, between 2 and 5%. Another reason why this is untrue is because GAAP requries that companies keep loss allowances on their balance sheets. Accountants spend a ton of time, determining how big these reserves should be, and very often they are wildly incorrect (in the case of the mortgage purveyors who failed during the crisis). But those companies never did "pass on the cost to the consumer" they just continued minting cheap money until they died almost overnight. Ml-Implode is one of my favorite sites that points to the 383 mortgage lenders who have failed since the crisis began.
2. Question: Who is liable?
Answer: I've addressed this in question one a bit. But there are other issues. When a company is going bankrupt, or when it stock price drops below a certain value, it becomes a prime target for acquisition. M&A is something that I only know a little bit about. But in terms of my discussion here. When a company buys a company that has been sued, the new owner becomes the owner of all of the liabities of the old owner. This is why most companies prefer to buy only the assets of a company, and of course, those are the first to go in bankruptcy. The adage “sellers sell stock, and buyers buy assets” is appropriate here because the assets in the subprime fiasco were worth a fraction of what they were listed at on the firm's balance sheets. So when Bank of America bought Merrill Lynch, they bought the whole thing. When they realized in horror that Merrill hadn't been exactly forthright in describing their positions, they tried to recoil from the sale. Of course, by then it was too late, Paulson and Bernanke thought it was a good idea, and wouldn't let the bank withdraw from its initial terms. In cases like these, the original executives at the sued firms are still liable, but they're not the deep pockets. Oh, they can afford to shed a couple million, maybe a couple hundred million, but only the successor company can really pay.
3. Question: What is a misstatement?
Answer: NPR did a reasonable job on this, but I don't think they really understood that a "misstatement" is the backbone of all securities litigation, civil or criminal. It all comes down to the Securities and Exchange Acts of 1933-4 and Rule 10b-5.
"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
To employ any device, scheme, or artifice to defraud,
To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security"
So what securities lawyers typically do is that they comb the field of public information and look for bold statements about the health of a company. It has to be public, it has to be bold. If it's not public, or if it can be argued that the audience of a particular statement was too few to be important, than the misstatement will be judged immaterial. If it's not bold, or flagrantly wrong, it will be very difficult for a lawyer to make the argument that the company was "omit[ing] to state a material fact" Corporate executives have become wise to this, and are generally very careful to couch their public statements in mealey mouth terms. They also managed to get a rider stuck into the securities law called the Safe Harbor statement. Talk to any securities lawyer and they'll complain about the PSLRA. This act, established in 1995, was a reform bill to limit the number of "frivolous" securities lawsuits. It was a powerful act, and the numbers of securities cases dropped dramatically afterward. The Safe Harbor statement was one small part of it. It's attached to every public filing, and it states basically. that any forward looking statement is subject to the uncertainty of the market, and unforseen events. It's a legal disclaimer, and it's supposed to say "don't blame us if the ship starts to sink, there's no way we could have known about that iceberg."
4. Question: Who reads the prospectuses?
Answer: Securities analysts, maybe. Securities lawyers, definitely. The laywers who wrote them, obviously. The investing public, never. This is a major issue at stake in cases before the court, right now. When securities are issued, they're offered through a multitude of ways. If you're a large public institition (by which I mean, you trade on a public exchange) then you have issue "FWPs" or Full Writing Prospectuses. These documents are several hundred pages long, and sort of introduce to the investing public, what the security will be. After the prospectus has been filed, 424Bs are issued for that prospectus that are more particular. These 424Bs are equally as voluminous in nature. And in the case of some securities are actually quite honest. You can find FICO scores for all of the loans that a major mortgage lender has used to securitize a pool of assets there. This is a major issue in securities law. If the prospectuses are public--and the toxcicity of an asset was disclosed, then how can the investor sue? It means admitting that the information was out there, and you didn't look. Therefore it's your fault. There is a lot of literature out on this, the least of which is Judges decisions. And that leads to another big issue. Obama needs to get liberal judges to the bench!!!
5. Question: What is the taxpayer's role?
Answer: I've gone into this before, so I won't belabor it. When you pay your taxes, that money ceases to be yours. Just because it's a democracy, doesn't mean it's your money anymore. You'll get some of that money back, through tax refunds, social services, police, fire, transit, utility services, but it's not yours. This came up briefly in the NPR broadcast when Chana-Jaffe asked some random Britt what he thought of his taxpayer money going to the Carpenter's Union of New Jersey. She asked a Britt, because RBS, like BoA and Citi here, was bought almost entirely by the government. The brit made an excellent point, (paraphrased) "Well, if I had to take it out of my pocket, it'd be a different story wouldn't it?" So when a securities settlement collects on a judgement--it's not coming out of your pocket, no way, no how. Furthermore, the government is in the business for the long term. They don't have to sell a toxic asset right away. They can sit on it for sixty years if they want. Maiden Lane LLC, the entity which manages much of the toxic assets has already seen positive returns. The NYT ran a piece describing nearly 4 billion dollars in profits from bailout funds administered to banks--and that was in August of last year!! If the U.S. Government has to payout to investors because of the bad decisions of corporate executives, its the least they can do, considering the fact that the SEC has been settling for hundreths of a penny on the dollar, piddling little settlements and fines like the one issued to Goldman Sachs today.
I happen to have a personal interest in this subject. Their treatment of the subject was pretty good, but it failed to address, and I'd like to add to its address of several topics of importance.
1. Who pays in a securities lawsuit?
2. Who is liable?
3. What is a misstatement?
4. Who actually reads the prospectuses?
5. My favorite, what is the taxpayer's role?
So the podcast discussed a toxic asset bought by the Planetmoney team as an experiment, playfully named "Toxie." Toxie was a bunch of mortgages that were originated by Countrywide, and securitized by Royal Bank of Scotland (RBS). It all started when a listener of theirs told them they were being sued, as an owner of Toxie. This is not entirely true. They bought into the liability of Toxie, but long after Toxie was written down, and resold as an asset. Toxie was worth 2.7 million when she was born, but is now worth 36,000. Who do the securities lawyers go after? The orginators and the securitizers, as well as the buyers who bought in at marketprice. But in this context, they became curious about who was to pay if Toxie was found to be fraudalent. To their credit, the Planetmoney team, got really excited by the securities law. They thought that the lawyers were going after the originators and securitizers with guns blazing. Clearly, and much to my own disappointment, the securities laws don't really allow for this. That's what the SEC is supposed to do. But the SEC rarely takes cases to trial. And they humiliatingly lost the last one they brought to trial in the Eastern District of New York, Bear Stearns. In the interest of brevity, let's go to my questions:
1. Question: Who pays in a securities lawsuit?
Answer: The insurance pays for most of it. That's right, just like every other kind of insurance you can buy, most companies buy legal insurance. Given that securities fraud is so hard to prove, its a winning bet for the insurers, usually. The company does pay too. So do the individual defendents. But of a 100 million dollar settlement, an insurer will pay for at least 40 million of it.
This is important because the main argument against it has always been that if you're suing the company to pay the shareholder, you're actually suing the current shareholders. Trading on the stock market is inherently risky, and anyone who isn't prepared to take those risks should get out of the game. There is also the threat that you can sue a company out of existence. This was the fear in the case against Washington Mutual. That case didn't survive anyway, but there was a definite fear that there wasn't enough coin in the till to pay anyone for the loss of market capitalization in the stock drop.
Another myth is that the company that was sued will just "pass on the cost to the consumer." This is untrue because prices are determined by the market. Companies, particularly in commoditized markets really have very little say in how they can price their goods. Diamond markets are a good example of this--the profit margin in diamond selling is pretty narrow, between 2 and 5%. Another reason why this is untrue is because GAAP requries that companies keep loss allowances on their balance sheets. Accountants spend a ton of time, determining how big these reserves should be, and very often they are wildly incorrect (in the case of the mortgage purveyors who failed during the crisis). But those companies never did "pass on the cost to the consumer" they just continued minting cheap money until they died almost overnight. Ml-Implode is one of my favorite sites that points to the 383 mortgage lenders who have failed since the crisis began.
2. Question: Who is liable?
Answer: I've addressed this in question one a bit. But there are other issues. When a company is going bankrupt, or when it stock price drops below a certain value, it becomes a prime target for acquisition. M&A is something that I only know a little bit about. But in terms of my discussion here. When a company buys a company that has been sued, the new owner becomes the owner of all of the liabities of the old owner. This is why most companies prefer to buy only the assets of a company, and of course, those are the first to go in bankruptcy. The adage “sellers sell stock, and buyers buy assets” is appropriate here because the assets in the subprime fiasco were worth a fraction of what they were listed at on the firm's balance sheets. So when Bank of America bought Merrill Lynch, they bought the whole thing. When they realized in horror that Merrill hadn't been exactly forthright in describing their positions, they tried to recoil from the sale. Of course, by then it was too late, Paulson and Bernanke thought it was a good idea, and wouldn't let the bank withdraw from its initial terms. In cases like these, the original executives at the sued firms are still liable, but they're not the deep pockets. Oh, they can afford to shed a couple million, maybe a couple hundred million, but only the successor company can really pay.
3. Question: What is a misstatement?
Answer: NPR did a reasonable job on this, but I don't think they really understood that a "misstatement" is the backbone of all securities litigation, civil or criminal. It all comes down to the Securities and Exchange Acts of 1933-4 and Rule 10b-5.
"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,
To employ any device, scheme, or artifice to defraud,
To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security"
So what securities lawyers typically do is that they comb the field of public information and look for bold statements about the health of a company. It has to be public, it has to be bold. If it's not public, or if it can be argued that the audience of a particular statement was too few to be important, than the misstatement will be judged immaterial. If it's not bold, or flagrantly wrong, it will be very difficult for a lawyer to make the argument that the company was "omit[ing] to state a material fact" Corporate executives have become wise to this, and are generally very careful to couch their public statements in mealey mouth terms. They also managed to get a rider stuck into the securities law called the Safe Harbor statement. Talk to any securities lawyer and they'll complain about the PSLRA. This act, established in 1995, was a reform bill to limit the number of "frivolous" securities lawsuits. It was a powerful act, and the numbers of securities cases dropped dramatically afterward. The Safe Harbor statement was one small part of it. It's attached to every public filing, and it states basically. that any forward looking statement is subject to the uncertainty of the market, and unforseen events. It's a legal disclaimer, and it's supposed to say "don't blame us if the ship starts to sink, there's no way we could have known about that iceberg."
4. Question: Who reads the prospectuses?
Answer: Securities analysts, maybe. Securities lawyers, definitely. The laywers who wrote them, obviously. The investing public, never. This is a major issue at stake in cases before the court, right now. When securities are issued, they're offered through a multitude of ways. If you're a large public institition (by which I mean, you trade on a public exchange) then you have issue "FWPs" or Full Writing Prospectuses. These documents are several hundred pages long, and sort of introduce to the investing public, what the security will be. After the prospectus has been filed, 424Bs are issued for that prospectus that are more particular. These 424Bs are equally as voluminous in nature. And in the case of some securities are actually quite honest. You can find FICO scores for all of the loans that a major mortgage lender has used to securitize a pool of assets there. This is a major issue in securities law. If the prospectuses are public--and the toxcicity of an asset was disclosed, then how can the investor sue? It means admitting that the information was out there, and you didn't look. Therefore it's your fault. There is a lot of literature out on this, the least of which is Judges decisions. And that leads to another big issue. Obama needs to get liberal judges to the bench!!!
5. Question: What is the taxpayer's role?
Answer: I've gone into this before, so I won't belabor it. When you pay your taxes, that money ceases to be yours. Just because it's a democracy, doesn't mean it's your money anymore. You'll get some of that money back, through tax refunds, social services, police, fire, transit, utility services, but it's not yours. This came up briefly in the NPR broadcast when Chana-Jaffe asked some random Britt what he thought of his taxpayer money going to the Carpenter's Union of New Jersey. She asked a Britt, because RBS, like BoA and Citi here, was bought almost entirely by the government. The brit made an excellent point, (paraphrased) "Well, if I had to take it out of my pocket, it'd be a different story wouldn't it?" So when a securities settlement collects on a judgement--it's not coming out of your pocket, no way, no how. Furthermore, the government is in the business for the long term. They don't have to sell a toxic asset right away. They can sit on it for sixty years if they want. Maiden Lane LLC, the entity which manages much of the toxic assets has already seen positive returns. The NYT ran a piece describing nearly 4 billion dollars in profits from bailout funds administered to banks--and that was in August of last year!! If the U.S. Government has to payout to investors because of the bad decisions of corporate executives, its the least they can do, considering the fact that the SEC has been settling for hundreths of a penny on the dollar, piddling little settlements and fines like the one issued to Goldman Sachs today.
Monday, April 19, 2010
Rachel Maddow's Job Chart -- The Bikini Graph
I think this is the most unreported economic story of the month. Amazingness points to Rachel Maddow for pointing out. And I think Rachel Maddow and staff got from a blogger whose been charting the numbers.
It's called the Bikini Graph, and it charts jobs loss/growth over the last few years, month by month. There are no great pictures available on the net that I could find, so I took the liberty of taking this one from the Rachel Maddow blog itself, a still from her April 2nd broadcast.
If you're an economist tracking the economy, this is a pretty great trend. Nevermind that the unemployment rate is still 10%. Not that it's not important, but the unemployment rate is calculated based on the number of job seekers. In a long recession, people give up searching and leave the rolls. They come back when they become more optimistic. So that number is likely to go up for a couple of months. But look at the action on that chart. The peak of job loss was back in December of 2008, the last month of the Bush Administration. Numbers have gone from terrible to bad, to good. And the fact that there is a long tail on the improvement, indicates to me that it's a pretty solid trend. One that could go all pearshaped if the Dems don't hold the House and Senate.
But I'm no economist. Yet. The simple fact is that the mid-terms will depend in part on how American's view the economy. And as Sarah Palin said to mock Obama, I think this provides ample evidence that "that hopey-changey-thing" is working out for us. More people have got to see this... So take this picture, or a better one if you can find it, and post away.
Saturday, March 27, 2010
Those who Short Obama--Beware
I read this little piece of commentary in Slate this morning and it made me quite happy. So, despite the ardent predictions of doom by the radical right, the stock market has risen quite happily since the passage of the Healthcare bill. By the way, since I didn't write anything about it while it was happening, allow me to say:
Wooohoooo!
Look, like all ravingleftatics, I wanted a single-payer system--but getting anything through that morally bankrupt mass of congressmen who were pre-ejaculating in their excitement to quash this bill is an achievement. And, so it seems, due entirely to a partnership of Nancy Pelosi and President Obama. Well good on them. I don't like that the abortion thing managed to slip its way in there, but again, we can pass stronger measures specifically to protect a woman's right to choose. Or slip them in some other omnibus bill. How will this play in the midterms? I don't know, but it would have played disastrously if they'd failed to do it. And Joe Biden? This is a big fucking deal was spot on. Shows that Biden is more of a mensch than Bush ever was in even his wildest G.I. Joe fantasies.
Back to the subject at hand, and the point of this post. One of the most aggravating excuses libertarians give to demonstrate how the free market will grow exponentially only completely unfettered is that strict regulations will encourage capital investors to flee to less regulated places. I can only imagine this being true in one situation. A situation just like 2007 where the market was inflating wildly because of fraud, negligence and non-existent due dilligence. Indeed, when money is easy, go ahead and invest it elsewhere. It doesn't hurt the U.S. and it helps build countries that really need the additional capital. Look at Spain, look at Greece, look at Dubai! Oh wait, look at the collapsing economies of Europe. Look at the people who are suggesting we dissolve the EU and go back to individual currencies. If companies are deciding to invest their money elsewhere, it's time to take your own money and put it under the pillow.
If accounting has taught me anything, it's taught me that despite our faults, the U.S. economy is one of the most protected in the world. And the only other places where anyone would feel comfortable investing their money, are places with similar rules. England, Australia, Japan, Canada. Think about it, where else would you put your money if you wanted it to be safe? Somewhere where the risk is so high it could disappear tomorrow? Regulations establish just cause for market confidence. So there is no basis for the idea of capital flight. The only safe economies in which to invest your money are well regulated economies. Like any risk assessment, the returns for speculation can be high, but then, you get what you pay for. People are looking for a safe place to park their money. Pruning regulations won't help anyone right now. Especially the third and second worlds, who are desperate to instill confidence in their own economies.
Wooohoooo!
Look, like all ravingleftatics, I wanted a single-payer system--but getting anything through that morally bankrupt mass of congressmen who were pre-ejaculating in their excitement to quash this bill is an achievement. And, so it seems, due entirely to a partnership of Nancy Pelosi and President Obama. Well good on them. I don't like that the abortion thing managed to slip its way in there, but again, we can pass stronger measures specifically to protect a woman's right to choose. Or slip them in some other omnibus bill. How will this play in the midterms? I don't know, but it would have played disastrously if they'd failed to do it. And Joe Biden? This is a big fucking deal was spot on. Shows that Biden is more of a mensch than Bush ever was in even his wildest G.I. Joe fantasies.
Back to the subject at hand, and the point of this post. One of the most aggravating excuses libertarians give to demonstrate how the free market will grow exponentially only completely unfettered is that strict regulations will encourage capital investors to flee to less regulated places. I can only imagine this being true in one situation. A situation just like 2007 where the market was inflating wildly because of fraud, negligence and non-existent due dilligence. Indeed, when money is easy, go ahead and invest it elsewhere. It doesn't hurt the U.S. and it helps build countries that really need the additional capital. Look at Spain, look at Greece, look at Dubai! Oh wait, look at the collapsing economies of Europe. Look at the people who are suggesting we dissolve the EU and go back to individual currencies. If companies are deciding to invest their money elsewhere, it's time to take your own money and put it under the pillow.
If accounting has taught me anything, it's taught me that despite our faults, the U.S. economy is one of the most protected in the world. And the only other places where anyone would feel comfortable investing their money, are places with similar rules. England, Australia, Japan, Canada. Think about it, where else would you put your money if you wanted it to be safe? Somewhere where the risk is so high it could disappear tomorrow? Regulations establish just cause for market confidence. So there is no basis for the idea of capital flight. The only safe economies in which to invest your money are well regulated economies. Like any risk assessment, the returns for speculation can be high, but then, you get what you pay for. People are looking for a safe place to park their money. Pruning regulations won't help anyone right now. Especially the third and second worlds, who are desperate to instill confidence in their own economies.
Friday, February 19, 2010
It's Official: It's no longer Terrorism--It's Racism and Anti-Muslim
As usual Glenn Greenwald writes a brilliant post on something we've known for a long time. The people who have been brandishing Terrorism as a fiery sword of righteousness and justice, are complete liars and hypocrites.
They are not opposed to terrorism. They're opposed to Muslims, and "others" who are not of their own class and creed. They are biggots. Plain and simple. Anyone who waves the flag of "terrorism" should beware: your cover is blown.
Read Mr. Greenwald's post.
They are not opposed to terrorism. They're opposed to Muslims, and "others" who are not of their own class and creed. They are biggots. Plain and simple. Anyone who waves the flag of "terrorism" should beware: your cover is blown.
Read Mr. Greenwald's post.
Tuesday, February 16, 2010
Gunslinger's Dilemma
I'm behind in my podcasts. I operate this way on purpose. Not sure if that's rational, but my rationalization for it is this: news of the day is charged with a sense of immediacy that interferes with understanding the content. The really big events are reported on for weeks. Blips on the chart might occupy an entire news cast, but not be remembered past three or even two days.
(Photo: Stephen King's Gunslinger Series)
Anyway, I uncovered one from the BBC newscast that I thought was interesting. I've linked to the article it was based on. Basically, some UK researchers wanted to examine whether or not a gunslinger from the old American west would be more likely to survive if he drew first, or if he drew second. The article pointed out two important concepts: 1) Securing the moral highground, that is: shooting second becomes an act of self-defense, and 2) the logical imperative of a preemptive strike, meaning: logically you'd think you're more likely to survive if you shoot first..
What the study, though completely idiotic, was sort of interesting to me because I thought it could help undermine theories of preemptive war. The study proved the following:
Anyway, I uncovered one from the BBC newscast that I thought was interesting. I've linked to the article it was based on. Basically, some UK researchers wanted to examine whether or not a gunslinger from the old American west would be more likely to survive if he drew first, or if he drew second. The article pointed out two important concepts: 1) Securing the moral highground, that is: shooting second becomes an act of self-defense, and 2) the logical imperative of a preemptive strike, meaning: logically you'd think you're more likely to survive if you shoot first..
What the study, though completely idiotic, was sort of interesting to me because I thought it could help undermine theories of preemptive war. The study proved the following:
In a series of "laboratory gunfights" - with pistols replaced by electronic pressure pads - researchers found that participants who reacted to their
opponent's movement were on average 21 milliseconds faster to the draw.
If the reaction is faster than the action, why act at all?
As many young men, I grew enamored of the philosophies of Machiavelli and the German Chancellor Otto von Bismark. So moved was I, by these warlike ideas, that I saved two quotes to my quote book:
As many young men, I grew enamored of the philosophies of Machiavelli and the German Chancellor Otto von Bismark. So moved was I, by these warlike ideas, that I saved two quotes to my quote book:
No government, if it regards war as inevitable even if it does not want it, would be so foolish as to leave to the enemy the choice of time and occasion and to wait for the moment which is most convenient for the enemy--Bismark
Men must be either pampered or annihilated. They avenge light offenses; they cannot avenge severe ones; hence, the harm one does to a man must be such as to obviate any fear of revenge.--Machiavelli
Well, I was young then, and not the biggest boy in the playground. I was eager to prove my manhood, and infatuated by G.I. Joe and action films. I was a child. I began to reject these ideas as a teenager, but even until recently, I held privately, that these ideas must be true. I was a pacifist, but--were there a need, it would make more sense to strike first, and strike hard. it is hard to escape this logic, particularly in personal encounters. The few fights I've had would seem to encourage this thinking. Most people, or most men I should say, are all talk. All bluster and bravado. Therefore a good drubbing would end the need for further conflict. Maybe.
However, personal encounters aside, I think that this rational for preemptive war is repugnant. And though this study in no way discusses, nor purports to support any policy rationale, I'm going to draw one anyway.
It might be, that were the United States to fire off it's entire arsenal of nuclear weapons at a potential aggressor they would "obviate any fear of revenge." However, such a treatment, even by war mongers is so unlikely as to be sheer grandiose, pompous, nonsense. Far more likely, we would engage in wars like Iraq. Which, while the preemptive strike did eliminate the Saddam Regime, might well end up permanently losing for the United States, the war on terror. As we have permanently ceded the moral highground, there can be no victory--short of genocide--which is most definitely NOT a victory. Furthermore, the aggressor was not, in fact, Saddam, or Iraq, but a worldwide terrorist agency.
Which is to say, preemptive war is not sound policy, but sheer idiocy. I think a good example of the reaction speed of retaliatory attacks would be the American build up and entry into World War II. Despite moves by FDR to motivate the U.S. entry into the war--the country wasn't sold, and may well never have been had the Japanese not attacked us at Pearl Harbor. The reaction speed of the U.S. to the attack is consigned to history.
Another more thorny example would be the Cold War. There you had a terrifying arms race, and side battles fought in extraneous nations, but no preemptive direct attack by either nation. And when that armsrace bankrupted the U.S.S.R, it collapsed, averting war altogether. That would be another argument against preemptive war.
Interestingly, as someone who has played a variety of war games over the years--Heroes of Might and Magic, Age of Empires, and StarCraft*. Preemptive war was always the way to win. However--and this is an important point to note: War Gamers are an interesting breed. The real players, not dabblers like myself, would spend hours timing the collection of resources, the build times for war factories, and the best number and type of units for use in a preemptive attack. Naturally, they did the same for defense. Amateurs like myself would read their collected data and attempt to put it to use. This worked well on other amateurs, including myself. But if that attack failed--as it inevitably would when you fought more skilled players--the preemptive attacker was so overexposed and depleted that a successful counter attack could annihilate the attacker. (Photo: Here the marines run a preemptive attack on the Zerg base. By sending in troops before the other side has fully mobilized they are afforded the opportunity to destroy the resource gathering units of the enemy, crippling his production capabilities)
But think about this. A video game is programmed by a team, and has a very specific set of rules--that never alter. That preemptive attacks could work, were basically manipulations of chance by a clever use of statistics in a static world. Needless to say, (but saying it anyway) this not a static world. There are no rules for engagement, and statistics are merely a guide for what's possible, not a set regime for reality.
I'd love for any gamers to chime in here. Like I said, I was an amateur gamer, and would love a more practiced player to comment.
*Here's a shoutout to the 710 alliance. The group me and my old roomies formed to battle the other denizens of the seventh floor of our dorm.
But think about this. A video game is programmed by a team, and has a very specific set of rules--that never alter. That preemptive attacks could work, were basically manipulations of chance by a clever use of statistics in a static world. Needless to say, (but saying it anyway) this not a static world. There are no rules for engagement, and statistics are merely a guide for what's possible, not a set regime for reality.
I'd love for any gamers to chime in here. Like I said, I was an amateur gamer, and would love a more practiced player to comment.
*Here's a shoutout to the 710 alliance. The group me and my old roomies formed to battle the other denizens of the seventh floor of our dorm.
Thursday, January 14, 2010
First post of the new year-Critique of Obama
Micah Sifry at Salon has a searing critique of Obama that I thought was fairly well written. I don't agree with all of his points, and I would have preferred a more thorough examination of Obama's policies in the piece. Then again, that's not his point, which is:
By the end of his campaign, Obama had a real populist movement in his hands, but he has not been a populist president and is showing no signs of changing.
Meaning that the comparison is less about policy, and more about evidence of a growing disconnect between the record numbers of regular joes who voted for him. For many of us this was no surprise. I remember heated arguments with my father pointing to Opensecrets.org and noting that Goldman Sachs had contributed more money to Obama's campaign than anyone else. I then compared him to Edwards whose biggest campaign contributor was a reputable non-profit (my apologies, I forget who).
They had a very clever campaign, but as much as I hate to admit it, my view of the election aligns with some fairly common conservative commentary. Meaning The Next New Thing and Thank God Bush is Leaving. (Many people like to claim race as a factor, but my approach is to simplify it. Our highly media driven society is obsessed with "new" and "first" and "originality" what did a rich, white, old, and definitely not "new" but at 4th or 5th sequel, McCain possibly have to offer against the shiny new "it" guy.) The Thank God Bush is Leaving, requires no explanation. So attributing the groundswell of support to the campaign is a bit overdramatic.
By the end of his campaign, Obama had a real populist movement in his hands, but he has not been a populist president and is showing no signs of changing.
Meaning that the comparison is less about policy, and more about evidence of a growing disconnect between the record numbers of regular joes who voted for him. For many of us this was no surprise. I remember heated arguments with my father pointing to Opensecrets.org and noting that Goldman Sachs had contributed more money to Obama's campaign than anyone else. I then compared him to Edwards whose biggest campaign contributor was a reputable non-profit (my apologies, I forget who).
They had a very clever campaign, but as much as I hate to admit it, my view of the election aligns with some fairly common conservative commentary. Meaning The Next New Thing and Thank God Bush is Leaving. (Many people like to claim race as a factor, but my approach is to simplify it. Our highly media driven society is obsessed with "new" and "first" and "originality" what did a rich, white, old, and definitely not "new" but at 4th or 5th sequel, McCain possibly have to offer against the shiny new "it" guy.) The Thank God Bush is Leaving, requires no explanation. So attributing the groundswell of support to the campaign is a bit overdramatic.
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